Definitions Relevant to Telecommunications
- Electronic communications network: transmission systems using electrical, magnetic, or electromagnetic energy to convey signals, including necessary apparatus and software.
- Electronic communications service: services primarily involving the conveyance of signals via electronic networks, encompassing wired, wireless, fixed, cellular, mobile, and integrated services plus value-added and future technologies.
Responsibilities of the Grantee to the Public
- The grantee must operate with honesty, avoiding obscene transmissions, deliberate falsehoods, and subversive or treasonable acts.
- It must extend and improve services in unserved areas and hazard-prone regions, as designated by relevant authorities.
- The grantee is required to upgrade facilities to comply effectively with the Free Mobile Disaster Alerts Act (RA No. 10639).
Term and Continuity of Franchise
- The franchise period is 25 years from the Act's effectivity, subject to earlier revocation.
- Continuous operation is required; failure to operate for two consecutive years results in automatic revocation.
Acceptance of Franchise
- The grantee must submit a written acceptance to Congress within 60 days from the Act's effectivity.
- Failure or refusal to accept renders the franchise void.
Tax Provisions and Fiscal Obligations
- The grantee is liable for taxes on real estate, buildings, and personal property, except for certain exempted telecommunications equipment and parts.
- It must pay value-added tax (VAT) on gross receipts from franchise operations.
- Income tax obligations under the National Internal Revenue Code remain applicable.
- Tax returns must be filed and are subject to audit by the Bureau of Internal Revenue.
Restrictions on Transfer and Assignment
- The franchise or controlling interest cannot be sold, leased, transferred, assigned, or granted usufruct without prior Congressional approval.
- Any transferee is subject to the franchise’s original terms, conditions, and restrictions.
Public Listing Requirement
- The grantee must list at least 30% of its authorized capital stock on a Philippine securities exchange within two years unless already wholly owned by a publicly listed company meeting this threshold.
Compliance with Labor Standards
- The grantee must adhere to applicable labor laws and regulations, considering the telecommunications industry’s characteristics.
Mobile Number Portability (MNP)
- The grantee is mandated to provide MNP for all subscribers.
- It must establish mechanisms to implement MNP and interconnect with infrastructure of other telecommunications franchisees.
- The grantee must not install features that impede a nationwide MNP system.
- The National Telecommunications Commission (NTC) will issue implementing rules.
Equality Clause
- Any advantages or privileges granted under existing or future telecommunications franchises, upon Congressional approval, shall be accorded to the grantee.
- This does not affect franchise territorial coverage, lifespan, or authorized service type.
Penalty for Non-Submission of Annual Reports
- Failure to submit annual reports to Congress results in fines: P1,000,000 per working day once the provision becomes applicable, with an interim fine of P500 per working day.
- The NTC collects the fine separately from other penalties and remits it to the National Treasury.
Continuity and Applicability of Other Provisions
- Provisions of RA No. 7294 not inconsistent with this Act remain effective.
- Pending suits related to the original franchise continue under RA No. 7294.
- Existing liabilities and unpaid assessments from March 27, 1992, remain enforceable under the previous law.
Effectivity of the Act
- The Act takes effect 15 days after publication in the Official Gazette or a newspaper of general circulation.